The U.S. property-casualty insurance sector has suffered its worst losses since 2002, according to two leading industry organizations. The sector’s net income dropped by $13.9 billion in the first half of 2008, a 57.4-percent drop compared to income in the first half of 2007, Insurance Services Office (ISO) and the Property Casualty Insurers Association of America (PCI) reported. Insurers also had $5.6 billion in net losses on underwriting – last year, they gained $14.5 billion.

Disproportionate deterioration for mortgage and other financial guaranty insurers partially skewed the numbers. Not counting the mortgage and financial guaranty insurers, the property-casualty industry’s net income by fell 38.8 percent.

“Mortgage and financial guaranty insurers account for a significant amount of the deterioration in underwriting results for the industry overall, but underwriting results deteriorated across the board,” said Michael Murray, ISO’s assistant vice president for financial analysis.
 
It should be noted that current financial turmoil had little effect on the property-casualty industry because of insurers’ “conservative investment practices,” David Sampson, PCI president and CEO, said. He added that the insurance industry “remains sound and well able to fulfill its obligations to policyholders.”